Alan Mulally To Remain At Ford Through 2014
After months of speculating, Alan Mulally, CEO of Ford Motors (NYSE: F) finally announced that he plans to stay with the company throughout 2014.
Mulally was once considered to be the front runner to replace Microsoft's (NASDAQ: MSFT) outgoing CEO, Steve Ballmer.
His candidacy had faded in recent weeks as the search team at Microsoft wanted a candidate with technology experience.
Bill Gates emphasized the need to find a CEO with “the ability to lead a highly technical organization and work with top technical talent” during Microsoft's shareholder meeting in November.
“I would like to end the Microsoft speculation because I have no other plans to do anything other than serve Ford,” Mulally told the Associated Press on Tuesday.
Mulally's lack of public comments on the issue led many to conclude that Mulally would be booking a one-way ticket to his home state of Washington. Ford's recent promotion of Mark Fields to chief operating officer in December further speculated that Mulally's candidacy with Microsoft was finalized and Ford was implementing a succession plan.
Now that the investment community has digested Mulally's “very specific, definitive answer,” several analysts have offered their remarks.
“The questions about Alan and Microsoft weren't going to go away without some type of very specific, definitive answer,” said David Cole, chairman emeritus of the Center for Automotive Research.
Daniel Ives, analyst at FBR Capital said that the news is a “a disappointment” to Microsoft shareholders as Mulally was the favored front-runner.
“Ultimately, we believe Alan Mulally holds the proper mix of ingredients to steer the company in the right direction over the coming years,” Ives wrote in a note on December 17 before concluding, “we believe Mr. Mulally is the clear favorite to lead Microsoft back to being known not just as a technological stalwart but as an innovator and major player in key secular areas (e.g., SaaS, cloud, mobile) on track for consistent top-line profitability growth.”
Stephen Elop, former head of Nokia, was Ives' second choice behind Mulally. Elop has now moved up to the top spot as the next potential CEO candidate according to Ives, but outsiders such as Paul Maritz, CEO of Pivotal, Pat Gelsinger, CEO of VMWare and Sheryl Sandberg, COO of Facebook may still be under consideration.
Israel Hernandez, analyst at MKM Partners said that Mulally was seen by activists as being an executive that is capable of engineering a more shareholder-friendly strategy. Hernandez believes that an internal candidate will now be promoted to CEO, with Elop, Satya Nadella and Tony Bates among the leading candidates.
Shares of Microsoft opened lower by around 1 percent, as investors and traders digested what analysts describe to be as “disappointing” news.
Shares of Ford, on the other hand, traded higher by more than 1.5 percent as investors breathed a sigh of relief. Mulally, credited with turning the company around following its 2008 lows, will remain with the company throughout a busy 2014. Ford plans to introduce 16 new or redesigned models in North America, triple its number for 2012.
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